Today’s all about electric cars and batteries and the amount of money car companies are gonna spend, the headwinds they’re gonna face, and all the raw materials the world is gonna need to pull it together.
Welcome to The Morning Dump, bite-sized stories corralled into a single article for your morning perusal. If your morning coffee’s working a little too well, pull up a throne and have a gander at the best of the rest of yesterday.
One (Point Two) Trillion Dollars!
Reuters put out an analysis this weekend that says automakers are going to spend $1.2 trillion dollars by 2030 on electric vehicles, which makes sense when you consider all the plants they’re building.
From the news site’s analysis:
The EV investment figure, which has not previously been published, dwarfs previous investment estimates by Reuters and is more than twice the most recent calculation published just a year ago.
To put the figure in context, Alphabet, the parent company of Google and Waymo, has a market cap of $1.3 trillion.
Automakers have forecast plans to build 54 million battery electric vehicles in 2030, representing more than 50% of total vehicle production, according to the analysis.
To support that unprecedented level of EVs, carmakers and their battery partners are planning to install 5.8 terawatt-hours of battery production capacity by 2030, according to data from Benchmark Mineral Intelligence and the manufacturers.
To put that in context, Ford spends about $142 billion a year on everything it does.
We Don’t Have Raw Earth Materials For The Above Yet
The last century, in many ways, was shaped by the search for fossil fuels. It’s what has powered the world, and the possession of these resources (or access to them) was and is key for governments. The coming century will see a shift towards the raw materials necessary to make all the batteries for all the cars that all the governments say companies will have to make.
Automotive News points out that the International Energy Agency determined that this means roughly 50 more lithium mines, 60 more nickel mines, and 17 more cobalt mines just to meet the 2030 EV projections.
And here’s some more cold water from the Automotive News report:
Sourcing the necessary metals will be a daunting task, said J-P Martins, a partner at consulting firm Partners in Performance. Not only are some materials found in just certain corners of the world, when it comes to sourcing them locally, time will be an added challenge: Getting a new mine up and running in the U.S. can take as long as a decade.
“The big hurdle to meeting these goals,” Martins said, “is where on Earth are all the materials going to come from?”
Over the past year and a half, the Biden administration has been attempting to answer that question by spurring more domestic mining and processing of critical battery materials, both of which are dominated by China and other nations. This year, the administration invoked the 1950 Defense Production Act to encourage companies to mine lithium, nickel, graphite, cobalt and manganese domestically, allowing companies access to federal funding to do so.
The “Earth” part of that quote kind of answers the “where” part in that great quote. In our hopeful and reasonable yearning for a future powered by relatively cleaner fuels we’re going to end up doing some more damage to it. On balance, maybe it’ll work out. The alternative is reducing demand by creating greater density in cities, improving transit, and adjusting our behaviors.
Since that’s not gonna happen, let’s dig some more mines to make more Teslas!
Well, Maybe Not That Many More Teslas
One of the debate’s during Friday’s TMD was whether or not Elon Musk was being entirely truthful when he said that logistics had more to do with smaller numbers of deliveries than demand, especially in China. There’s probably some truth to both perspective and a coming price war isn’t just indicative of softer demand, it also reflects an increase in supply as more and more companies enter the fray.
Again from Reuters this weekend:
China Merchants Bank International (CMBI) said Tesla’s price cuts underlined the growing competitive risk for EV makers in China, with industry-wide sales projected to slow into 2023.
“The price cuts underscore the possible price war which we have been emphasising since August,” said Shi Ji, an analyst with CMBI.
CMBI analysts warned last week that 2023 would bring more competition to the EV sector, saying it expected to see sales growth for EVs and hybrids on a combined basis to drop below 50%.
Tesla is the most valuable car brand in the world, but it isn’t the only one. If I’m going out for ice cream and they have Pecan Praline for $6 and Mint Chocolate Chip for $5, well, I think I’d be happier with the Mint Chocolate Chip and the dollar.
A Major Bogey
Let’s take a break from all the EV talk for a fun one from Fox 5 NY in my favorite category of golf stories: The Prize That Wasn’t A Prize. Here’s the report from Fox 5:
Austin Clagett sunk a hole-in-one at the Morrilton Country Club. And expected to get the keys to a Ford F-150 courtesy a local dealership.
Little did he know, the hole-in-one would launch a legal battle.
The car wasn’t awarded to him after all, and he filed a lawsuit against the country club and the dealership.
“When it was Austin Clagett’s turn to try to get a hole-in-one, Austin Clagett hit the ball and it went in the hole on the first attempt,” a news release from the law firm of Denton & Zachary said, via KATV. “
It seems that the dealer is now claiming that the truck was only there for “advertising purposes” because they couldn’t get insurance for the truck fast enough (I’m assuming prize insurance in the off chance someone does what Clagett did). Per the Fox 5 article, the dealership also claims they didn’t know that the country club involved posted the prize on Facebook.
I think we all know how this is going to end.
I’m tired this morning because I stayed up late celebrating the Astros victory. With the World Series coming up someone is going to walk away with a brand new car for being the MVP of the series. For instance, Stephen Strasburg got a C8 Corvette. I believe GM is a sponsor again this year so, assuming you were the MVP of the series (let’s assume Jeremy Pena) what vehicle from the GM lineup would you want?
Photo credits: Top GM, GM, Tesla, Faulkner County Courts